Guy Hands, the City financier who runs Terra Firma Capital Partners, has vowed
not to set foot in Britain for two years in protest at the Government's lack
of clarity over its 90-day tax rule.

The financier is now conducting all official business in his capacity as chairman of EMI, the music group, and Terra Firma from his Guernsey offices, where he moved earlier this year, flying senior executives over to the Channel Islands for key meetings.

He is understood to have sold his London house as part of his commitment not to return to the UK for some time over his unhappiness with rules that make UK citizens living abroad pay tax if they spend more than 90 days in the country.

The distance is unlikely to make managing EMI's London-based talent any easier, as Terra Firma continues its struggle to turn around the record label following its acquisition at the peak of the buyout market in 2007.

Terra Firma was forced to make a €1.3bn (£1.16bn) writedown on the value of the music company in March because of a steep decline in the value of sterling and falling asset values since the start of the financial crisis.

But the bulk of Mr Hands's investors are based in the US, his biggest investment is in Germany and his latest acquisition is cattle ranches in Australia.

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"He has just taken a conservative view over the 90-day tax rule and decided to stay away, whether that's for one year, two or three," said one person close to Mr Hands. "Where he is in the world doesn't make a great deal of difference."

Mr Hands' move to Guernsey was made in frustration at the Government's decision to increase the top rate of income tax payments to 50pc from next year.

Terra Firma, which also owns the Odeon cinema chain and the aircraft leasing company AWAS as well as EMI, has paid £1.4bn in UK taxes since it was established 15 years ago, according to people close to the company.

The firm is retaining its headquarters in London, with its day-to-day management conducted by new chief executive Tim Pryce, who took over the reins from Mr Hands earlier this year.